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China's smaller banks eyed to run fund firms

China's pilot project that has allowed banks to operate fund management companies will be expanded.

The People's Bank of China, the China Banking Regulatory Commission, and the China Securities Regulatory Commission will allow more commercial banks to establish fund management companies.

Smaller lenders such as China Merchants Bank, China Minsheng Bank and Shanghai Pudong Development Bank will be targeted in the pilot's second batch under the expanded plan.

Investors will be able to channel more of their wealth to the capital markets for long-term investments under the plan which increases the number of institutional investors as well as stimulates the development of the fund management industry, the newspaper said.

The State Council, China's Cabinet, approved the plan proposed by the three regulators in September.

The big-five lenders - the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, the Bank of China and the Bank of Communications - already run their own fund management firms.

The CSRC is also studying allowing insurance asset management companies to manage public funds.